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SPM Corp. v. M/V Ming Moon

filed: April 14, 1994.

SPM CORPORATION
v.
M/V MING MOON BLUE ANCHOR LINE, A DIVISION OF TRANSPAC CONTAINER SYSTEM, LTD. APPELLEE; YANGMING MARINE TRANSPORT CORPORATION APPELLANT MAHER TERMINALS, INC. APPELLANT



On Appeal from the United States District Court for the District of New Jersey. (D.C. Civ. No. 89-02784).

Before: Scirica and Alito, Circuit Judges and Pollak,*fn* District Judge

Author: Pollak

Opinion OF THE COURT

POLLAK, District Judge :

This admiralty case is before us for the second time. In our earlier Disposition, SPM Corp. v. M/V Ming Moon, 965 F.2d 1297 (3rd Cir. 1992), we decided certain questions related to defendants' liability to plaintiff, and then remanded the case to the United States District Court for the District of New Jersey for further consideration of claims for indemnification and attorney's fees by one defendant against two co-defendants. Defendants Yangming Marine Transport Corp. (Yangming) and Maher Terminals Inc. (Maher) now appeal from the district court's judgment of April 21, 1993, which orders them to pay $61,556.15 in attorney's fees to defendant Blue Anchor Line (Blue Anchor).

Background : The underlying facts are not in dispute. Plaintiff SPM Corporation (SPM) was the importer and purchaser (with a view to resale) of machinery manufactured and owned by Sumitomo Heavy Industries (SHI). SHI engaged Blue Anchor, a non-vessel operating common carrier (NVOCC)*fn1, to arrange transport of the machinery from Yokohama to SPM, in Norfolk, in June, 1988. Blue Anchor in turn contracted with Yangming, a ship operator and owner, to provide ocean carriage of SPM's machinery aboard the M/V Ming Moon. Blue Anchor negotiated a bill of lading to SPM, as consignee. Yangming, the ocean carrier, issued its own bill of lading to Blue Anchor's agent in Japan.

On the way to Norfolk, the M/V Ming Moon docked at Port Elizabeth, New Jersey. During the stopover, the machinery shipped by SHI and intended for SPM was temporarily removed and then restowed aboard the ship by Maher, Yangming's contract stevedore. The machinery was damaged during restowing, and was salvageable only for $15,000 in parts by the time it reached Norfolk. At trial Maher admitted negligence in handling the cargo. SPM filed suit against Blue Anchor, Yangming and Maher for damages of $265,175.

After a bench trial in 1991, the district Judge ruled that the defendants' liability was statutorily limited to $500 each under the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1304(5), which states:

Neither the carrier nor the ship shall in any event be or become liable for any loss or damage in connection with the transportation of goods in an amount exceeding $500 per package . . . unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

The district court also ruled that Blue Anchor was entitled to indemnification from Yangming and Maher for damages it owed to SPM as well as for its attorney's fees in defending against SPM's complaint.

SPM appealed the judgment, arguing on a variety of grounds that the statutory damages limitation should not apply. We affirmed as to Yangming and Maher, but reversed the liability limitation as to Blue Anchor. We found that Blue Anchor's bill of lading specified a damages limitation of two dollars per kilogram, which in this case worked out to $40,800. M/V Ming Moon, 965 F.2d at 1301-02. We did not address the district court's ruling on indemnification and attorney's fees for Blue Anchor, but rather remanded for a corrected judgment and for final resolution of the undetermined claims. Id. at 1306.

The instant appeal arises out of the remand proceedings. After considering cross motions for summary judgment, the district Judge ruled that (1) Yangming's and Maher's liability for indemnification damages to Blue Anchor was limited by the Yangming bill of lading to $500, and (2) Blue Anchor was entitled to $61,556.15 in attorney's fees from Yangming and Maher. In this appeal, Yangming and Maher challenge the ruling on attorney's fees.

Discussion : Appellants' arguments may be summarized as follows: (1) COGSA does not provide for, and is violated by, an award of attorney's fees; (2) even if attorney's fees are permissible in an indemnity context, indemnity is inappropriate here because Blue Anchor was a shipper in its relationship to Yangming, not Yangming's agent, and as such cannot recover from Yangming for claims that Blue Anchor paid to SPM; (3) even if Blue Anchor may recover attorney's fees, such fees are part of damages and cannot exceed the $500 damages limitation under COGSA; and, in any case, no attorney's fees are warranted because Blue ...


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